Sources in Jerusalem made clear Thursday that there has been no change in the prime minister’s policy on settlement construction and that there would be no second settlement freeze.

The clarification was made in response to a report that quoted the head of the National Security Council expressing concern that Israel’s settlement construction policy was harming relations with the West.

National Security Adviser Yaakov Amidror warned of a deterioration in Israel’s international standing as a result of construction in disputed areas of the West Bank during recent private meetings in the prime minister’s bureau, according to a report published Thursday in Haaretz.

Amidror reportedly said that it is “impossible to explain” Israel’s continued construction to allies such as Germany and Canada.

“Construction in the settlements has become a diplomatic problem and is causing Israel to lose support even among its friends in the West,” he was quoted as saying.

The Prime Minister’s Office did not deny the report.

Amidror’s words, if accurately reported, would stand in stark contrast to statements he made to diplomats at the Foreign Ministry’s annual ambassadors’ conference in Jerusalem in December. At that gathering, Ron Prosor, Israel’s UN envoy, questioned the timing of the government’s announcement of the renewal of West Bank building in the controversial E1 corridor between East Jerusalem and Ma’aleh Adumim directly on the heels of the Palestinian Authority’s successful bid to upgrade its status at the UN to that of a nonmember observer state in November. Prosor’s inquiry was greeted with applause from the assembled ambassadors, but Amidror reportedly responded coldly, admonishing the diplomats.

“You are representatives of the government. If it’s inconvenient for you, go into politics or resign,” Amidror reportedly said then. “Our role is to advise, and later leaders make the decisions. If you have thoughts about policy issues, you can express them in a closed forum.”

Days before the UN granted nonmember observer status to the Palestinians in November, however, Amidror reportedly opposed responding with new settlement construction, a view shared by Yitzhak Molcho, Prime Minister Benjamin Netanyahu’s special envoy for negotiations with the Palestinians.

Molcho will reportedly deal with the substantive preparations for the presidential visit, while Amidror will work on the more technical aspects. Obama is tentatively scheduled to arrive in late March or early April.

However, Danny Ayalon, the former deputy foreign minister, said Thursday that Obama is hoping to host a summit between Netanyahu and PA President Mahmoud Abbas during his visit.

“I have no doubt that already they [the Americans] are working on arranging a meeting between Netanyahu and Abbas,” Ayalon told Israel Radio. “Obama would not come if he weren’t certain of results.”

“The Americans want to prove at the beginning of Obama’s second term that they are still a superpower that can deal with several fronts at once,” added Ayalon. “If he [Obama] returns to Washington without relaunching negotiations or at least the beginnings of a diplomatic solution, it will weaken him on the international stage.”

US Ambassador to Israel Dan Shapiro said on Wednesday that “President Obama is not coming to the region with conditions or demands. He is coming to confer with all our partners about problems and challenges we are dealing with in the region.” Shapiro insisted Obama would not seek “a specific result” in any discussions related to “bringing Israel and the Palestinians back to the negotiation table.”

For its part, the Palestinian Authority has expressed support for the upcoming Obama visit and said it hopes the president will use the opportunity to push for an end to Israeli settlement construction.

“The visit is a positive indicator,” said Nabil Abu Rudeineh, a spokesman for Abbas. “But we need deeds and real US pressure on Israel rather than meetings. We need a new US policy.”

“We wish the US administration will exert pressure on Israel to stop settlement expansion in order to lay the ground for the establishment of an independent Palestinian state on the Palestinian territory within the borders before June 4, 1967,” he said.

Direct talks between Israel and the PA have been frozen since September 2010, at the tail end of a 10-month settlement building moratorium. Israel says it is willing to return to the negotiation table, but Abbas insists settlement construction must end as a precondition to talks.

The election of a new Israeli Knesset has led to speculation of a new peace initiative being brought forward in Netanayhu’s next term. The visit by Obama, who said he would not travel to Israel until he could move something forward by doing so, is thought by some to be timed to coincide with the formation of the new government.